# FAQ

### What problem is Solid World solving?

Solid World is addressing the critical problems plaguing the carbon markets, which include illiquidity, lack of transparency, structure, and standardization. These issues have tarnished the industry's reputation and hindered its ability to combat climate change effectively. High-quality carbon projects struggle to access liquidity and scale their operations, while companies face difficulty finding a high-quality supply of certified carbon credits. The market's opacity and lack of structure result in a supply crunch, with demand outpacing the industry's current capacity.

Solid World is creating key infrastructure for transparent and efficient carbon markets to resolve these challenges. Their solutions include financing carbon projects by enabling them to sell forward credits at a discount, providing risk assessment through the CRISP framework, offering true liquidity, and fostering a collaborative climate finance warehouse. By connecting carbon projects with potential buyers, Solid World ensures a more stable and efficient market. Their diverse team and strong partnerships with industry players further support their mission to revolutionize the carbon markets and contribute to a sustainable future.

### What is a carbon credit?

A voluntary carbon credit is a tradable certificate representing the reduction or removal of one metric ton of carbon dioxide equivalent (CO2e) from the atmosphere by a specific project or initiative. In the voluntary carbon market, organizations and individuals can purchase these credits to offset their own greenhouse gas emissions, taking responsibility for their environmental impact. Voluntary carbon credits are generated by projects such as renewable energy, energy efficiency improvements, afforestation/reforestation, or carbon capture and storage. To ensure credibility and effectiveness, these projects should adhere to internationally recognized IETA-endorsed standards like the Verified Carbon Standard (VCS) or the Gold Standard, which provide guidelines for monitoring, reporting, and verifying emissions reductions.

### Are carbon credits greenwashing?

Carbon credits can be seen as a genuine effort to reduce greenhouse gas emissions and combat climate change. Still, their effectiveness depends on the quality and rigor of the projects and the monitoring systems in place. In some instances, carbon credits have been criticized as a form of greenwashing, particularly when organizations use them to claim they are making meaningful contributions to sustainability while avoiding making significant changes to their own operations or practices. The perception of greenwashing can arise if companies rely solely on purchasing carbon credits without addressing their own emissions or if the projects they support lack additionality, permanence, and proper monitoring.

To counter the risk of greenwashing, organizations must prioritize reducing their own emissions first and foremost and then use carbon credits as a supplementary measure to offset the remaining unavoidable emissions. Transparency and strict standards for carbon offset projects are essential to ensure their legitimacy and effectiveness. By adhering to internationally recognized standards, such as the Verified Carbon Standard (VCS) or the Gold Standard, organizations can help guarantee that their investments in carbon credits are contributing to real, additional, and verifiable emissions reductions rather than merely serving as a greenwashing tool.

### Why are you dealing with credits that are not certified yet?

Forward selling carbon credits allow carbon projects to access the liquidity they need to scale.

Many carbon projects face challenges in securing the funding needed to launch and maintain their operations, as they typically require significant upfront investments and might not generate immediate returns. By forward-purchasing carbon credits, organizations can provide these projects with the financial support they need to become operational and generate the desired environmental benefits.

From the perspective of the organizations purchasing the credits, forward-purchasing can offer several advantages. First, it allows organizations to lock in carbon credit prices before they potentially rise, helping them manage future costs associated with offsetting their emissions. Second, by supporting projects in their early stages, organizations can demonstrate their long-term commitment to sustainability and climate action, enhancing their reputation and credibility.&#x20;

### How do you ensure projects follow through and deliver the required credits?

We have a thorough due diligence process based on our SW-CRISP framework, which works to identify key risks associated with forward carbon deals. This limits the amount of supply that can be forward-sold, limiting the risk of shortfalls. Additionally, the contracts we sign stipulate replacement credits being provided in the case of non-delivery, with legal contracts being signed only with entities in countries with strong legal systems. We also limit forward selling to 5 years, as uncertainty in the carbon markets increases drastically after that point due to international agreements making the use-value of credits unclear past that point.&#x20;

### **I'm looking to carbon offset a flight I just took. Say I need to offset 3 tonnes of carbon. Do I just need to buy 3 CRISP-M's (and stake etc)? i.e. is 1 forward credit the equivalent of 1 tonne of carbon?**

CRISP-M tokens in the Solid World protocol represent forward contracts for mangrove restoration projects that are intended to sequester carbon in the future. As such, they aren't intended for immediate carbon offsetting and retirement, but rather as a means of supporting these projects and contributing to future carbon sequestration.

When you purchase and stake CRISP-M tokens, you are providing liquidity and financial support to these projects, enabling them to carry out their work and ultimately contribute to the mitigation of climate change. It's a proactive and innovative way to support the climate cause and advance environmental sustainability. However, it's important to note that the actual carbon offsetting occurs in the future when the supported projects successfully sequester the carbon.

So in your case, buying and staking 3 CRISP-M tokens would not offset 3 tonnes of carbon immediately, but it would be a meaningful contribution towards supporting mangrove restoration projects and their future carbon sequestration efforts. Specifically, 1 CRISP-M token is equivalent to 1 ton of carbon expected to be sequestered in the future. Each token is 1:1 backed and represents a forward commitment to the removal of one ton of carbon dioxide through mangrove restoration.

### What types of carbon projects does Solid World focus on?

Solid World emphasizes quality, as we believe carbon projects that don't do proper carbon accounting and don't properly handle their relationships with local communities have significantly higher risks of becoming worthless over the timespans involved with forward financing. While we generally favor removal-based projects, we are exploring some avoidance-based categories to see if they can meet proper carbon accounting standards and significantly benefit their local communities. Here is a selection of areas we are interested in right now (though please keep in mind that this is a non-exhaustive list)

**Mangrove restoration (Verra)** - These projects focus on restoring and conserving mangrove ecosystems, which play a critical role in carbon sequestration, coastal protection, and biodiversity preservation. These projects not only help reduce greenhouse gas emissions by capturing and storing significant amounts of carbon dioxide but also provide valuable ecosystem services such as nursery habitats for marine life, natural barriers against storm surges and erosion, and support for local livelihoods through fisheries and tourism. By preserving and restoring mangroves, these projects contribute to global climate change mitigation efforts and promote environmental, social, and economic sustainability in coastal communities.

**Community-oriented terrestrial ARR** **(Verra)** - These projects involve planting new forests or restoring degraded ones, focusing on engaging local communities. These projects contribute to climate change mitigation by increasing carbon sequestration and offer various social, economic, and environmental benefits. By involving local communities, ARR projects foster sustainable livelihoods, improve biodiversity, and promote soil conservation. Furthermore, they help raise environmental awareness, empower communities through capacity-building and knowledge transfer, and even reduce poverty by creating income-generating opportunities in areas such as agroforestry and ecotourism.

**Biochar (Puro)** - These projects involve the production and application of biochar, a charcoal-like material created through the pyrolysis of biomass, which can be incorporated into the soil to improve its fertility and structure. These projects are valuable to society for several reasons. First, they contribute to climate change mitigation by sequestering carbon dioxide, as biochar effectively locks away carbon for extended periods, preventing its release into the atmosphere. Second, biochar enhances soil health by increasing water retention, nutrient availability, and microbial activity, improving agricultural productivity and food security. Lastly, biochar production can also support waste management by transforming agricultural and forestry residues into valuable soil amendments, reducing the need for environmentally harmful disposal methods.

**Enhanced Cookstoves (Gold Standard)** - These projects focus on distributing and adopting improved, energy-efficient cookstoves in communities that rely on traditional cooking methods, which often involve open fires or inefficient stoves. These projects are valuable to society because they significantly reduce greenhouse gas emissions and deforestation by requiring less fuel for cooking. In addition, the improved cookstoves help decrease indoor air pollution, a major health concern in many developing countries, as the cleaner-burning stoves reduce exposure to harmful smoke and particulate matter. By promoting enhanced cookstoves, these projects contribute to improved public health, reduced environmental impact, and greater energy efficiency, making them an essential component of sustainable development efforts.
